Regency IPO

Regency Cruises is being taken public again but company officials would not release details at press time. A preliminary filing has been made with the Securities and Exchange Commission.

When Regency Cruises made its initial public offering (IPO) in 1985, the company raised net proceeds of $5.5 million.

When the Lelakis Group acquired Regency in May of 1993 and took the company private, it paid an estimated $30 million for the 67 percent of the shares that were still outstanding. That would put a total value on Regency of $45 million in May of 1993.

At that point, Regency had three ships, but owned only one ship, the 836-passenger Royal Odyssey, acquired from Royal Cruise Line for $22 million in 1987.

Putting only the one ship at the basis for the evaluation, Lelakis acquired Regency at a per berth price of approximately $54,000. Clearly, Lelakis paid for more than the one 30-year old ship. He also received the company's cash deposits, property and other equipment, as well as the established market position, organization and sales force of Regency Cruises.

In its 1992 annual report, Regency listed total current assets of $48.9 million plus property, equipment and so-called other assets at $16.5 million, and total assets of $65.4 million. Current liabilities and long term debt were listed at $28 million.

Regency is now a six-ship fleet although it is unclear if the "new" Regency owns more than the Regent Sun. The other ships were previously chartered to Regency by companies owned and/or controlled by the Lelakis Group.

Earnings Course

Regency reported a loss of $1.2 million in 1985, but then a string of net earnings of $5.7 million in 1986; $6.3 million in 1987; $3.9 million in 1988; $4.2 million in 1989; $761,000 in 1990; and $1.7 million in 1991. It posted a loss of $856,000 in 1992.

Regency attributed its 1992 loss to pressure on prices. The cruise line carried more people in 1992 than ever, but at lower rates, while promotional costs and charter costs were up.

The company had previously been able to compensate for the "softness" of the Caribbean summer market by repositioning to Alaska.

Regency may still be profitable, operating with low capital costs; attracting passengers by being price competitive; by positioning ships on attractive itineraries; and by offering a traditional cruise experience. But it will not be an easy task.